MACROECONOMIC INDICATORS IN BH AND BANKING SECTOR IN BH
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Transcript of MACROECONOMIC INDICATORS IN BH AND BANKING SECTOR IN BH
MACROECONOMIC INDICATORS INMACROECONOMIC INDICATORS IN
BHBH AND AND BANKING SECTOR BANKING SECTOR IN IN BHBH
Sarajevo, JanuarySarajevo, January 25 25, 2005, 2005
KEMAL KOZARIĆ, KEMAL KOZARIĆ,
CENTRAL BANK OF BOSNIA AND HERZEGOVINACENTRAL BANK OF BOSNIA AND HERZEGOVINA
2
Basic indicators of BH economyBasic indicators of BH economy
Banking system in BH:Banking system in BH:Commercial banking sector in BHCommercial banking sector in BH
Central bank of BH (CBBH)Central bank of BH (CBBH)
Contents Contents
3
According to the official data, GDP of BH in 2003 was According to the official data, GDP of BH in 2003 was KM 12,170 billion. If the effects of the informal sector KM 12,170 billion. If the effects of the informal sector included, according to the CBBH estimations, GDP was included, according to the CBBH estimations, GDP was KM 16,770 billion.KM 16,770 billion.
For the period 1999-2003, average estimated rate of For the period 1999-2003, average estimated rate of real GDP growth was 5, 4%, which can be considered real GDP growth was 5, 4%, which can be considered as favorable rate, given the structural changes which as favorable rate, given the structural changes which BH is passing currentlyBH is passing currently
The growth over the short-termed period is The growth over the short-termed period is estimated to be estimated to be 5,5, 5%. 5%.
Basic indicators of BH economyBasic indicators of BH economy
4
Basic indicators of BH economyBasic indicators of BH economy::GDP GDP
15,7
9,8
5,54,4
5,5
3,5
0
2
4
6
8
10
12
14
16
18
1998 1999 2000 2001 2002 2003
Ch
an
ge
in % 3,5%
5,5% 5,5% 5,5% 5,5%
0%
2%
4%
6%
2003 2004 2005 2006 2007
Real GDP(annual change in %)
Real GDP growth projection
(Source: CBBH) (Soource: PRSP)
5
Basic indicators of BH economyBasic indicators of BH economy::Real GDP - Comparison in the region Real GDP - Comparison in the region
(Source: Transition Report Update, EBRD, March 2004.)
(annual change in %)
-7%
-5%
-3%
-1%
1%
3%
5%
7%
2000 2001 2002 2003Cha
nge
in %
BH BulgariaCzech Republic CroatiaMacedonia SloveniaSerbia and Montenegro
6
Inflation is stable and low. In November 2004, it Inflation is stable and low. In November 2004, it amounted 0, 6%, representing one of the lowest amounted 0, 6%, representing one of the lowest inflation rate in the region. inflation rate in the region.
Stability and inflation level are result of successful Stability and inflation level are result of successful running of the CBBH’s monetary policy according to running of the CBBH’s monetary policy according to the principles of the Currency Board Arrangement, the principles of the Currency Board Arrangement, meaning fixed KM exchange rate pegged to euro. meaning fixed KM exchange rate pegged to euro.
Basic indicators of BH economyBasic indicators of BH economy::InflationInflation
7
Basic indicators of BH economy:Basic indicators of BH economy:InflationInflation
Inflation in BH Comparison with the inflation in the region
(Source: CBBH) (Source: Transition Report Update, EBRD, March 2004, IMF Country Report No: 04/67 March 2004)
0%
2%
4%
6%
8%
10%
12%
2000 2001 2002 2003
BH Croatia Czech Republic Slovenia Bulgaria Macedonia
0%
1%
2%
3%
4%
5%
6%
2000 2001 2002 2003 Nov. 2004.
Inflation in BH
8
According to the official data, unemployment rate in BH According to the official data, unemployment rate in BH was the largest in the region and in October 2004 was was the largest in the region and in October 2004 was 43%. However, these data should be considered with 43%. However, these data should be considered with caution having in mind the estimated volume of grey caution having in mind the estimated volume of grey economy economy and method of recording of unemployed, so the and method of recording of unemployed, so the estimate of real unemployment rate in estimate of real unemployment rate in 2003 2003 was was 19,19, 6%. 6%.
Basic indicators of BH economyBasic indicators of BH economy::UnemploymentUnemployment
22,9%21,1%
19,6%
0,0%
10,0%
20,0%
30,0%
2001 2002 2003
(Source: CBBH – data on unemployment with grey economy included)
9
Imports coverage with exports in December 2004, Imports coverage with exports in December 2004, totaled to 32%.totaled to 32%.
According to indicators of the total economic activities According to indicators of the total economic activities with abroad, BH still records high foreign trade deficit, with abroad, BH still records high foreign trade deficit, which, for the first 11 months of 2004 totalled to KM which, for the first 11 months of 2004 totalled to KM 6, 93 6, 93 billionbillion. .
Basic indicators of BH economy:Basic indicators of BH economy:Imports coverageImports coverage with exports with exports
10
Servicing of the foreign debt is carried out successfully. At Servicing of the foreign debt is carried out successfully. At the end of the third quarter of 2004, foreign debt balance was the end of the third quarter of 2004, foreign debt balance was KM 4, 1 billion. Total amount of the foreign debt in the KM 4, 1 billion. Total amount of the foreign debt in the observed period is by 1, 4% higher compared to the end of observed period is by 1, 4% higher compared to the end of 2003. 2003.
During 2004, it was continued the implementation of the During 2004, it was continued the implementation of the accountable fiscal policy, directed to stabilization of accountable fiscal policy, directed to stabilization of macroeconomic situation in BH.macroeconomic situation in BH.
The Agency for Indirect Taxation has been established at the The Agency for Indirect Taxation has been established at the state level and activities are directed towards the delivery of state level and activities are directed towards the delivery of legal regulations for VAT introduction. legal regulations for VAT introduction.
During 2003, the fiscal balance surplus was During 2003, the fiscal balance surplus was performedperformed for for the first time and over the first six months of 2004 it amounted the first time and over the first six months of 2004 it amounted to KM 149 million.to KM 149 million.
Basic indicators of BH economy:Basic indicators of BH economy:Foreign Foreign debt and fiscal policydebt and fiscal policy
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Basic indicators of BH economyBasic indicators of BH economy::Fiscal balanceFiscal balance
0,0%
1,4% 1,6%2,5%
4,6%5,6%
-0,2%
-1%
4%
9%
-5,2-5,8 -5,6
-4,6-3,6
0,2
-10
-8
-6
-4
-2
0
2
1998 1999 2000 2001 2002 2003
(In
GD
P %
)
Fiscal balance (deficit and surplus)
Fiscal deficit in countries of the region (2003)
(Source: Transition Report Update, EBRD, March 2004)
12
Foreign direct investment for nine months of 2004 Foreign direct investment for nine months of 2004 amounted to KM 532 million, while total foreign amounted to KM 532 million, while total foreign investments amounted to KM 943 million.investments amounted to KM 943 million.
Most of investments were in banking 35, 1%, Most of investments were in banking 35, 1%, manufacturing 31% and trade 11, 3% of total foreign manufacturing 31% and trade 11, 3% of total foreign direct investment.direct investment.
Most of investments were from Austria in amount of Most of investments were from Austria in amount of KM 269 million, followed by Croatia with KM 79 million KM 269 million, followed by Croatia with KM 79 million and Slovenia with KM 34 million. These three countries and Slovenia with KM 34 million. These three countries account for 72% of all direct foreign investment. account for 72% of all direct foreign investment.
The largest recorded inflow of investments was The largest recorded inflow of investments was during the second quarter. during the second quarter.
Basic indicators of BH economyBasic indicators of BH economy::Foreign investmentsForeign investments
13
Basic indicators of BH economyBasic indicators of BH economy::Foreign investmentsForeign investments
(Source: CBBH)
0
50
100
150
200
250
300
350
400
Jan-Mar '04 Apr-Jun '04 Jul-Sep '04
In K
M m
illi
on
Direct Total
14
CBBH foreign reserves have recorded constant growth. At CBBH foreign reserves have recorded constant growth. At the end of 2003 they amounted to KM 2, 781 billion. the end of 2003 they amounted to KM 2, 781 billion. According to the CBBH data, as of November 1, 2004, the According to the CBBH data, as of November 1, 2004, the CBBH foreign reserves amounted to KM 3, 341 billion.CBBH foreign reserves amounted to KM 3, 341 billion.
Indicators of BH economy:Indicators of BH economy:Foreign reservesForeign reserves
0,00
500,00
1.000,00
1.500,00
2.000,00
2.500,00
3.000,00
3.500,00
4.000,00
2000 2001 2002 2003 2004 nov.
Gro
ss r
eser
ves
0
1
2
3
4
5
6
In m
onth
s
Gross reserves Imports value per months
In KM million
(Source: CBBH)
15
Return of confidence Return of confidence
Savings growthSavings growth
Higher level of banking servicesHigher level of banking services
Real competitionReal competition
High level of foreign investments High level of foreign investments
Banking sector: Banking sector: Accelerated developmentAccelerated development
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Payment systems reform Payment systems reform
Significant increase in minimum of the banking Significant increase in minimum of the banking capitalcapital
Network of banks in entire BH Network of banks in entire BH
Deposit insuranceDeposit insurance
State-owned banks privatizationState-owned banks privatization
Banking sector: Banking sector: ChangesChanges
* Breakup not available. ** Data from September 31, 2004.
31.12.2000 31.12.2002 1.01.2005
Total number of banks 55 40 33
Ownership:
Private-owned banks 36 34 27
State-owned banks 19 6 6
Capital structure (in %):
State capital: 47 10 16**
Local private capital53*
24 20**
Foreign private capital 67 64**
Banking sector: Banking sector: Capital structureCapital structure
31.12.2000 31.12.2001 31.12.2002 31.12.2003 30.11.2004
Amoun
tShare
Amount
ShareAmoun
tShare
Amount
ShareAmoun
tShare
TOTAL CREDITS 1652 100% 2101 100% 3213 100% 5122 100% 5792 100%
PRIVATE COMPANIES
833 50% 988 47% 1304 41% 1860 36% 2376 41%
PUBLIC ENTERPRISES
322 20% 350 16% 361 11% 1167 23% 706 12%
CITIZENS 375 23% 647 31% 1415 44% 1966 38% 2587 45%
OTHER SECTORS 122 7% 116 6% 133 4% 129 3% 123 2%
(end of period – in KM million)
Banking sector: Banking sector: CreditsCredits
31.12.2000 31.12.2001 31.12.2002 31.12.2003 30.11.2004
Amount ShareAmoun
tShare Amount Share
Amount
Share Amount Share
TOTAL DEPOSITS 2094 100% 3324 100% 4158 100% 4366 100% 5502 100%
OUT OF THAT:
KM DEPOSITS 895 43% 1214 36% 1749 42% 2274 52% 2852 52%
FOREIGN CURRENCIES DEPOSITS
1199 57% 2110 63% 2409 58% 2092 48% 2650 48%
(end of period – in KM million)
Banking sector: Banking sector: Deposits of companies and citizensDeposits of companies and citizens
Banking sector: Banking sector: Interest ratesInterest rates
Date Private companies Households
Rates on short-termed
loansRates on long-termed
loansRates on “a-vista”
depositsLong term savings
Dec. 2002. 12,07% 10,59% 1,44% 4,38%
Dec. 2003. 10,54% 9,18% 0,96% 3,40%
Nov. 2004. 10,31% 9,15% 0,79% 3,78%
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For seven years of operations, the CBBH achieved its main For seven years of operations, the CBBH achieved its main task, which is maintaining of monetary and financial stability in task, which is maintaining of monetary and financial stability in the country, including the price stability. This is achieved by the country, including the price stability. This is achieved by consistent implementation of monetary policy through consistent implementation of monetary policy through Currency Board Arrangement. Currency Board Arrangement.
KM has become the stable currency against euro and has the KM has become the stable currency against euro and has the full confidence of citizens. The full convertibility in BH and full confidence of citizens. The full convertibility in BH and wider has been achieved and each KM in the circulation has wider has been achieved and each KM in the circulation has the full coverage in convertible foreign currency. the full coverage in convertible foreign currency.
Limitations of the Currency Board Arrangement: the CBBH Limitations of the Currency Board Arrangement: the CBBH cannot credit the government, cannot act as the lender of last cannot credit the government, cannot act as the lender of last resort, cannot directly fund the economic development, and resort, cannot directly fund the economic development, and the exchange rate cannot be used as the instrument the exchange rate cannot be used as the instrument adjustment of economic shocks or bad economic behavior.adjustment of economic shocks or bad economic behavior.
CBBH:CBBH:Achieved resultsAchieved results
22
The CBBH has established the Single Registry of The CBBH has established the Single Registry of Transaction Accounts Transaction Accounts
Preparations for transfer of the supervision over the Preparations for transfer of the supervision over the commercial banks’ operations in BH under the commercial banks’ operations in BH under the umbrella of the CBBH is underway. umbrella of the CBBH is underway.
The CBBH is actively participating in the The CBBH is actively participating in the development of the Capital Market in the country and development of the Capital Market in the country and in preparations for the European integrations.in preparations for the European integrations.
CBBH:CBBH:Present and planned activities Present and planned activities
DATE FOREIGN ASSETSMONETARY
LIABILITIESFREE RESERVES
DEC. 1997. 144,1 160,3 - 16,2
DEC. 1998. 283,3 253,9 29,4
DEC. 1999. 865,7 836,7 29,0
DEC. 2000. 1021,2 973,2 48,0
DEC. 2001. 2666,6 2591,6 75,0
DEC. 2002. 2463,2 2345,1 118,1
DEC. 2003. 2.779,6 2.626,3 153,3
NOV. 2004. 3.341,5 3.168,2 172,3
(end of period – in KM million)
CBBH:CBBH:Foreign reservesForeign reserves